Student loans are a growing and serious problem. Currently, it is very difficult to discharge student loans in bankruptcy but that does not mean that bankruptcy cannot help. Filing Chapter 7 for non-student loan debts may help free up resources that will allow you to make a more affordable payment plan with the student loan services.
Chapter 13 will allow you to make a payment plan for all of your debts, including student loans for a period of up to 5 years. The Chapter 13 trustee makes an equal payment to the student loans and to all the other unsecured creditors. While this may not amortize the student loan as quickly as a regular scheduled payment, it forces the student loan companies to accept a payment you can afford.
Finally, if you are able to pay your entire balance of student loans over the Chapter 13 plan period, you eliminate a substantial amount of interest you would otherwise be required to pay.
The attorneys at Heller & Thyen also can provide you with contacts for federally backed student loan programs that may allow you to get your student loan payments to an affordable payment.
Until July 2010, there were two sources of federal student loans – Direct Loans and Federal Family Education Loan Program (FFEL).
There are many different types of federal student loans, however the most popular loans are Stafford (subsidized/unsubsidized), PLUS (graduate and parent), and Perkins.
Private student loans are obtained through private lending institutions. They are issued based upon the applicant’s creditworthiness. Lenders routinely require a student borrower to obtain a co-signor in order to issue the loan. Private student loans became non-discharge-able in with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. This means that, generally speaking, private student loans are no longer discharge-able through a bankruptcy.
A great website that provides more information on income-based repayment plan is www.ibrinfo.org. A website that allows you to view the status of all of your federal student loans is www.nslds.ed.gov.
If you’re looking for a trusted and experienced attorney to assist with your student loan issues, contact the professionals at Heller & Thyen, P.A. today!
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